SYDNEY: Rio Tinto Group has scrapped plans to raise as much as US$5bil in a share sale following pushback from investors, people with knowledge of the matter say.
Executives at the mining giant had floated the possibility of an equity offering in recent investor meetings after announcing its results, the people said, asking not to be identified because the information is private.
The fundraising could have been used to help pay for its US$6.7bil takeover of Arcadium Lithium Plc as well as rebalance its shareholding between British and Australian investors.
Chief executive officer Jakob Stausholm said last month that raising money to rebalance the company’s share register was a possibility, but that no decision had been made.
Rio decided to shelve the idea after getting significant pushback from investors in recent meetings, especially as the company didn’t think the offering was a financial necessity, the people said.
A representative for Rio declined to comment.
The miner completed its Arcadium takeover last week, and said it was funding the acquisition by drawing on an existing bridge loan facility, which it plans to replace with long-term debt financing.
Goldman Sachs Group Inc and JPMorgan Chase & Co advised Rio on the acquisition.
As well as helping to pay for the Arcadium transaction, the raise would have also added more liquidity among its Australian holders.
Its share register is much more weighted to London, with about three-quarters of its stock there.
Shares of Rio have gained 1.7% in London trading this year, giving the company a market value of about £81bil or about US$105bil. — Bloomberg
